Quarterly Report
BIM & LOCFUND



December, 2020


CURRENT SITUATION

CURRENT PORTFOLIO PERFORMANCE INDICATORS


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QUARTER IN REVIEW

  • 2020 was marked by the COVID-19 pandemic, which negatively affected the performance of the economies in the region. This crisis initially affected the microfinance industry. However, it began a recovery process at the end of 2020. Despite this negative context, Locfund II was able to achieve a positive performance.

  • MFIs response to the crisis was positive. Portfolio quality indicators of the fund remained stable without negative effects. The exposure in MFIs with rescheduled loans decreased by USD 1.6MM between March and December. Consequently, 8 out of 12 MFIs resumed payments during the year. In addition, loans that are still in grace period, are making interest payments.

  • During 2020, Locfund II paid USD 24.9 MM to its Senior Lenders according to each Loan Agreement. In addition, the fund has already distributed USD 1.5MM to its equity investors in January 2021.

  • Due to the pandemic and the Economies recessions, the volatility of local currencies in the region led to devaluations in most countries. The impact on Locfund is mitigated by the manager’s strategy of increasing the exposure in dollarized and pegged regimes reducing the FX risk for the fund. During Q4 a recovery in LAC local currencies was observed which allowed the fund to recover FX results by USD 643K. Less volatility is expected in 2021.

  • Locfund II remains with an adequate performance due to its proactive strategy that allowed to maintain portfolio quality indicators, together with a positive financial income. These mentioned factors plus the FX recovery, allowed the fund to reach USD 1.5MM profit by 2020.


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ABOUT THE FUND

LOCFUND II L.P. offers local currency denominated debt instruments and targeted credit enhancement financial instruments to microfinance institutions (regulated or non-regulated), microfinance banks, institutional investors, cooperatives and small business banks, which facilitate funding to small and micro enterprises in Latin America and The Caribbean.

The fund also provides support for development activities to selected microfinance institutions and stimulates access to local securities markets for fixed income instruments issued by microfinance institutions.

The fund is managed by BIM Ltd.

EQUITY INVESTORS

LOCFUND II L.P. has eight equity inverstors which are: Multilateral Investment Fund, FMO, Norfund, BIO, Hyos Invest Holding AG, SIFEM, Panamerican Investments S.A. and BIM Microfinance II.

ACCUMULATED DISBURSEMENTS

OVERALL SUMMARY

FUND FACTS

PORTFOLIO PERFORMANCE INDICATORS

SOCIAL INDICATORS

FINANCIAL INDICATORS (USD)

BALANCE SHEET USD

BALANCE SHEET
Variable Total
Cash and cash equivalent 4,246,689
Portfolio 55,805,038
Capital Markets 3,728,972
Loans Receivable 48,283,380
Promissory Notes 3,792,686
Hedged Assets 0
Total Assets 59,976,710
Long Term Liabilities 0
Short Term Liabilities 19,656,806
Total Liabilities 19,656,806
Capital 31,100,000
Reserve for Currency Loss 352,757
Total Equity 40,319,902

PROFIT/LOSS SUMMARY

PROFIT/LOSS USD
Variable December Total
Loans Interests 399,171 6,225,711
Total Income 399,171 6,225,711
Management Fees -86,950 -1,203,992
Senior Loans Interests -82,186 -1,786,077
Others 0 -5,500
Total Expenses -179,332 -3,132,520
Profit/Loss before provisions 219,840 3,093,197
Bad Loans Provisions 30,403 -205,826
TSF Expenses -30,097 -134,063
TSF Income 30,097 134,063
Profit/Loss after provisions 250,242 2,887,369
Exchange Rate Difference 205,571 -1,422,901
Profit/Loss after FX 455,813 1,464,467

  • Despite a large amount of debt installments in 2020, the fund was able to maintain high liquidity figures as of December. During 2021, it is expected that the fund will realize installments for approximately USD 18.8MM, and also, equity and dividend distributions for USD 20MM.
  • As of December 2020, the currencies that showed recovery from September 2020 are COP (USD 375k) and MXN (USD 234k).

MFI DISTRIBUTION (MM USD)

TECHNICAL SUPPORT FACILITY

During 2020, 25 activities were approved by the donors committee, with estimated approved budget of USD 246K that corresponds to the following subcomponents: 44% in digital transformation, 38% in capacity building and 18% ESG. 8 activities have been already completed, benefiting 7 MFIs from 5 countries, 95 staff member were trained (23% female). Additionally, 17 consultancies are still in process. One of these is a SPI4 program aimed to train, accompany and monitor the institution’s staff in filling out the SPI4 tool, expecting to benefit at least 15 Locfund’s clients.

CAPITAL MARKETS COMPONENT

  • New bond issuances from clients in Colombia, Honduras and Guatemala are being postponed as a consequence of the COVID-19 impact and will be resume during the next year. Locfund II is not able to join tis efforts, but it is expected that Locfund Next will take the lead.

  • Potential secondary market transactions in El Salvador and Ecuador are expected to take place during the year.

SOCIAL PERFORMANCE

Exposure to Female clients

Exposure to Rural Clients


COUNTRY EXPOSURE

OUR TEAM

SOCIAL IMPACT

           

SOCIAL HIGHLIGHTS

During the pandemic, MFIs had to make significant adjustments to their internal operations and cost reduction in order to increase efficiency. However, they have not lost the client focus, and we would like to highlight some remarkable measures with three emphasis (staff members, clients and community):

  1. Appointing of a senior, fully dedicated person (part of the Board in some cases) focused on response to the Covid-19,

  2. Develop a specific response plan (e.g. Contactar, Ahsetfin, AMC, Adisa),

  3. Taking a customer-centric approach to keep in touch, support them and teach them to deal with the sanitary crisis (e.g. MiCredito, Espoir, Insotec, Diaconia, Contactar),

  4. Educate clients about alternative digital channels to reduce social contact (e.g. Espoir, Pro Mujer, Ilumina, Idepro), and

  5. Enable staff to work remotely (e.g. Contactar, Pro Mujer, Diaconía, Adisa).

DEVELOPMENTAL GOALS

(Below Data pertains exclusively to MFIs in fund´s portfolio)

(Most recent Social Indicators available, as of December 2020)

SOCIAL PERFORMANCE

(Social Performance Data pertains exclusively to MFIs in fund´s portfolio) (Most recent Social Indicators available, as of December 2020)

SOCIAL INDICATORS

GENERAL SOCIAL INDICATORS

FEMALE AND RURAL DISTRIBUTIONS

FEMALE PERCENTAGE

RURAL PERCENTAGE

DEVELOPMENTAL GOALS CHART

POVERTY AND INCOME INDICATORS

LOCFUND II COUNTRY EXPOSURE

OTHER COUNTRIES

  1. PPI: Progress out of Poverty Index. As reported by the MFI to the PPI (http://www.progressoutofpoverty.org/ppi-users).
  2. In accordance to the document elaborated by MIF/IDB in Nov 2014 named “Financial Inclusion Latin America and the Caribbean”, the microfinance average of loan in the region is USD 1.800.
  3. At Least 50% of Locfund II’s clients will have an average loan size to final clients of less than 40% of GDP per capita.
  4. Principal + Interest as of December 2020.
  5. GDP: Gross domestic product per capita, GDP per capita, PPP (constant 2017 international $), source: (https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.KD) (https://www.imf.org/en/Publications/WEO/weo-database/2020/April/select-country-group)
  1. HDI (Human Development Index). Source: 2019 Report, data compiled form official web site (http://hdr.undp.org/en/data#)
  2. Population below national poverty line (NPL). Source: (https://www.cia.gov/library/publications/the-world-factbook/)
  3. Gini Coefficient: Measure of the deviation of the distribution of income among individuals or households within a country from a perfectly equal distribution. A value of 0 represents absolute equality, a value of 100 absolute inequality. Source: (https://data.worldbank.org/indicator/SI.POV.GINI) N/A Not Available.

FINANCIAL STATEMENT

BALANCE SHEET

BALANCE SHEET

ASSETS

ASSETS
Variable January February March April May June July August September October November December
Total Assets 84,566,136 84,566,927 82,721,588 83,445,525 71,372,014 71,330,387 71,918,504 72,244,001 69,523,519 69,637,399 58,707,784 59,976,710
Cash and cash equivalent 5,688,535 5,999,822 8,774,368 10,793,920 830,034 2,526,032 4,367,650 6,505,332 8,406,741 10,724,344 1,044,205 4,246,689
BCP Miami 5,593,424 5,926,296 8,676,469 10,636,071 672,185 2,368,183 4,236,148 6,397,050 8,309,946 10,627,848 956,874 4,190,051
BCP Miami - Restricted Funds TSF 95,111 73,526 97,899 157,849 157,849 157,849 131,502 108,282 96,795 96,496 87,331 56,638
Additional Acces Fee - MFX 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000
Interest - MFX 184 358 392 317 239 169 99 29 0 0 0 0
Portfolio 75,057,887 74,856,073 71,523,704 69,969,374 68,431,453 66,635,725 65,115,431 63,383,517 61,324,889 59,019,672 57,680,618 55,805,038
Capital Markets 4,227,681 4,252,183 4,062,076 4,066,889 4,073,191 3,957,311 3,963,029 3,968,403 3,837,096 3,841,894 3,845,871 3,728,972
Loans Receivable 64,307,732 62,838,199 59,871,457 58,554,713 58,188,681 57,341,880 55,954,170 54,185,264 52,438,676 50,268,898 48,894,722 48,283,380
Promissory Notes 6,522,474 7,765,691 7,590,171 7,347,772 6,169,581 5,336,534 5,198,232 5,229,850 5,049,117 4,908,880 4,940,025 3,792,686
Hedged Assets 3,700,000 3,700,000 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 0 0 0 0
Hedged assets - Honduras 1,200,000 1,200,000 0 0 0 0 0 0 0 0 0 0
Hedged assets - Nicaragua 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 0 0 0 0
Impairment Provision Reserve -329,358 -330,859 -304,167 -244,569 -709,378 -550,223 -472,491 -468,216 -437,579 -509,639 -332,563 -302,160
Management Fee paid in advance 230,548 124,528 11,631 212,164 106,693 7,052 197,528 99,271 6,825 181,812 95,740 8,790
D&O Insurance paid in advance 7,093 5,911 4,729 3,547 2,364 1,182 0 13,945 12,677 11,410 10,142 8,874
Others 11,247 11,094 10,931 10,772 10,609 10,450 10,287 10,123 9,966 9,800 9,642 9,479

LIABILITIES

LIABILITIES
Variable January February March April May June July August September October November December
LIABILITIES 45,654,238 45,793,415 44,872,594 45,155,527 33,014,635 32,867,974 32,987,083 33,073,429 30,371,321 30,489,144 18,843,694 19,656,806
Short Term Liabilities 27,687,022 27,824,569 26,902,005 27,183,252 15,040,617 14,892,269 24,248,359 24,333,834 21,630,883 21,748,336 15,101,039 19,656,806
Accounts Payable 63,739 35,448 128,291 153,405 37,021 28,088 49,073 34,151 36,899 23,461 32,214 1,556,810
FUNDA-PRO 0 0 0 0 0 0 0 0 0 0 0 1,503,383
Advisory Committe Meetings Costs 0 0 0 0 0 0 0 0 0 0 2,100 2,100
Capital and Interest received in advance 32,094 9,049 61,478 130,684 9,149 0 18,670 0 0 0 0 26,179
Commitment Fees 4,361 4,361 4,361 4,361 0 0 0 0 0 0 0 0
Credit Committe Meetings Costs 0 0 0 750 750 0 1,500 1,500 500 500 0 0
External Auditors 21,784 16,538 15,790 15,041 18,789 22,536 26,284 30,032 33,780 19,534 23,281 18,036
Legal Services 5,500 5,500 5,500 2,569 8,333 5,552 2,619 2,619 2,619 3,427 6,833 7,112
Others 0 0 41,162 0 0 0 0 0 0 0 0 0
Hedged Liabilities 4,114,503 4,105,500 2,855,751 2,848,840 2,841,721 2,834,844 2,827,754 2,820,683 0 0 0 0
Hedged liabilities - Honduras 1,244,878 1,242,584 0 0 0 0 0 0 0 0 0 0
Hedged liabilities - Nicaragua 2,869,625 2,862,916 2,855,751 2,848,840 2,841,721 2,834,844 2,827,754 2,820,683 0 0 0 0
Senior Loans 23,413,669 23,610,095 23,820,064 24,023,158 12,004,026 11,871,488 21,240,030 21,370,718 21,497,189 21,628,379 14,981,494 18,043,358
BIO 505,167 510,000 515,167 520,167 525,333 500,000 1,005,167 1,010,333 1,015,333 1,020,500 1,025,500 500,000
HYOS 7,750 15,000 22,750 30,250 38,000 0 757,750 765,500 773,000 780,750 788,250 1,500,000
IDB 22,785,008 22,892,349 23,007,092 23,118,134 11,273,376 11,317,205 11,362,495 11,407,786 11,451,614 11,496,905 0 0
IIC 97,411 143,472 192,708 240,253 19,889 57,182 5,095,718 5,134,254 5,171,547 5,210,082 10,015,755 10,050,642
MIF 17,000 26,667 37,000 47,000 57,333 6,333 1,016,667 1,027,000 1,037,000 1,047,334 1,057,334 2,006,667
SIFEM 20,667 40,000 60,667 80,667 101,334 0 2,020,667 2,041,334 2,061,334 2,082,000 2,102,000 4,000,000
Deferred financing costs -19,334 -17,393 -15,320 -13,313 -11,239 -9,232 -18,434 -15,489 -12,639 -9,192 -7,345 -13,951
TSF (Donors) 95,111 73,526 97,899 157,849 157,849 157,849 131,502 108,282 96,795 96,496 87,331 56,638
TSF (Donors) 95,111 73,526 97,899 157,849 157,849 157,849 131,502 108,282 96,795 96,496 87,331 56,638
Long Term Liabilities 17,967,216 17,968,846 17,970,589 17,972,275 17,974,018 17,975,705 8,738,724 8,739,595 8,740,438 8,740,808 3,742,655 0
Senior Loans 17,967,216 17,968,846 17,970,589 17,972,275 17,974,018 17,975,705 8,738,724 8,739,595 8,740,438 8,740,808 3,742,655 0
BIO 500,000 500,000 500,000 500,000 500,000 500,000 0 0 0 0 0 0
HYOS 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 750,000 750,000 750,000 750,000 750,000 0
IIC 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 5,000,000 5,000,000 5,000,000 5,000,000 0 0
MIF 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 0
SIFEM 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 0
Deferred financing costs -32,784 -31,154 -29,411 -27,725 -25,982 -24,295 -11,276 -10,405 -9,562 -9,192 -7,345 0

EQUITY

EQUITY
Variable January February March April May June July August September October November December
EQUITY 38,911,900 38,773,506 37,848,991 38,289,995 38,357,376 38,462,417 38,931,416 39,170,574 39,152,198 39,148,260 39,864,088 40,319,902
Capital 31,100,000 31,100,000 31,100,000 31,100,000 31,100,000 31,100,000 31,100,000 31,100,000 31,100,000 31,100,000 31,100,000 31,100,000
BIM Microfinance 600,000 600,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000
BIO 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000
FMO 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000
Hyos Invest Holding AG 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000
MIF 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000
Norfund 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000
PISA S.A. 0 0 550,000 550,000 550,000 550,000 550,000 550,000 550,000 550,000 550,000 550,000
SIFEM 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
BIM Microfinance 600,000 600,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000
BIO 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000
FMO 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000
Hyos Invest Holding AG 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000
MIF 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000
Norfund 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000
PISA S.A. 0 0 550,000 550,000 550,000 550,000 550,000 550,000 550,000 550,000 550,000 550,000
SIFEM 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
Accumulated Results 7,187,347 7,187,347 7,187,347 7,187,347 7,187,347 7,187,347 7,187,347 7,187,347 7,187,347 7,187,347 7,187,347 7,187,347
Reserve for Currency Loss 574,803 565,434 523,400 529,253 552,435 553,276 530,701 518,577 487,982 466,405 361,158 352,757
Accumulated Reserve 568,087 568,087 568,087 568,087 568,087 568,087 568,087 568,087 568,087 568,087 568,087 568,087
Reserve of the Period 6,716 -2,653 -44,687 -38,834 -15,652 -14,811 -37,386 -49,510 -80,105 -101,682 -206,929 -215,330
Period Profit/Loss Net of FX Reserves 49,750 -79,275 -961,756 -526,605 -482,406 -378,206 113,368 364,650 376,869 394,508 1,215,583 1,679,798

PROFIT/LOSS (USD)

MONTHLY

ACCUMULATED


COUNTRY ANALYSIS